Lawmakers slam FCC for media rules

Lawmakers slammed rules at the Federal Communications Commission (FCC) that critics say constrain traditional media companies as they try to compete with their unregulated online competitors.

“Pretending that laws designed for an era before smartphones and the Internet will get the job done is an effective death sentence for many local media outlets,” Rep. Greg Walden (R-Ore.) — chairman of the House Commerce Subcommittee on Communications — said Wednesday during a hearing held by his subcommittee.

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“I fear that local broadcast and newspaper companies will continue to struggle against unregulated competitors whose business models are not hamstrung by decades-old regulatory assumptions,” he said.

Walden expressed concerns about newspapers that now have to compete with websites for advertising dollars and honed in on the agency’s rules regarding broadcast ownership of radio stations.

“I just think that you guys don’t get it that the market has changed dramatically,” he said pointing to the Internet-enabled radio and music services that fall outside of the FCC’s regulatory jurisdiction.

FCC Media Bureau Chief Bill Lake responded that the agency is “looking at those trends in music radio and other sources [which] haven’t indicated to us yet that we should change the rules.

The FCC is “very open to all input on that subject,” he added.

Subcommittee Republicans also criticized the FCC for a number of steps the agency has taken this year this year to crack down on collusion between broadcasters, including a vote in March to effectively ban broadcasters from sharing advertising sales resources.

The agency has also said it is reevaluating other resource-sharing arrangements and warned broadcasters that it would unfavorably on licensing deals between stations that have resource-sharing arrangements.

Citing the high costs of running a newspaper or local broadcast station, Rep. John Shimkus (R-Ill.) said it makes “sense to allow good companies with good resources to put their expertise to work in failing stations or newspapers.”

Rep. Bobby Rush (D-Ill.) joined in criticizing the agency, saying he is “absolutely, totally disappointed in the FCC and their position on minority ownership.”

“This is the worst time for media ownership by minorities,” he said.

Subcommittee ranking member Anna Eshoo (D-Calif.) defended the agency’s actions, saying that more media ownership consolidation would lead to less diversity and fewer benefits for consumers.

“I would suggest that some of the business models are out of touch with what the American people should be receiving,” she said.

Critics — including broadcasters, who have sued the agency over its actions this year — are quick to note that the FCC is moving forward with new media ownership rules without first conducting a congressionally-mandated quadrennial review of media ownership rules, which was due to Congress in 2010.

Lake told lawmakers Wednesday that the agency “is very aware of its responsibility” to conduct the review.

Wheeler has said he will include the 2010 review — which was started under former FCC Chairman Julius Genachowski — in the 2014 review that the agency is currently working on.

Eshoo again pushed back on the criticism of the FCC.

“The agency has an obligation to enforce existing rules on the books, regardless of the outcome of its review,” she said.